World Bank Approves an Additional $22.93 Million Grant to Support Grid-connected Rooftop Solar Program in India
The World Bank Board today approved an additional grant of $22.93 million to further enhance the installed capacity of Grid-connected Rooftop Solar Photovoltaic (GRPV) Program and strengthen the capacity of relevant institutions for widespread installation of GRPV.
The additional Global Environment Facility (GEF) grant will support the overall US$625 million GRPV program approved by the World Bank Board earlier this year, and a total program investment of US$915 million in solar rooftop developments. It will provide incentives to the State Bank of India to lend to riskier categories of GRPV customers such as the non-banking financial institutions (NBFCs) and small and medium enterprises (SMEs) to finance and install GRPV. It will also strengthen the investment climate for GRPV by building capacity of the main stakeholders involved in the expansion of GRPV.
Under the ongoing program, SBI is on-lending funds to solar PV developers and end-users, who wish to invest in mainly commercial and industrial rooftop PV systems.
“The Grid-connected Rooftop Solar program is critical to harnessing India’s solar potential. This additional financing will strengthen the capacity of key institutions and help in bringing international best practices to support the program fulfill its aim of developing at least 400 MW of GRPV across India,” said Junaid Ahmad, World Bank Country Director in India.
Despite energy shortages, and the high cost of backup supply, rooftop solar PV systems have not yet become widespread in India. This is primarily due to the lack of adequate financing, unfamiliar technology and low consumer awareness. Until now, those that wanted to install solar rooftop PV systems had to pay the full cost up-front. The total capacity of rooftop solar, therefore, remains low. These solar PV installations will provide clean, renewable energy, and reduce greenhouse gas emissions by displacing thermal generation.
The GEF will address a number of constraints in successful investments in GRPV. This includes commercial, policy and regulatory, technical and financing challenges.
The GEF grant includes knowledge support to the Electricity Distribution Companies (Discoms), training for State Nodal Agencies (SNAs), learning and knowledge sharing programs for policy makers and regulators to develop regulatory frameworks, technical training for investment bankers and technical and knowledge capacity building programs for project developers and SMEs, all of which will be guided by the Ministry of New and Renewable Energy alongside the World Bank.
“The knowledge and advisory support being made available through the GEF grant complements the financial support to the parent program. The overall Program of rooftop solar financing has just become effective, so we intend that this grant will be utilized quickly, to help build the capacity of utilities to implement solar rooftop projects, ensure smooth implementation of GRPV regulations, and help SMEs and NBFCs to access debt for rooftop projects,” said Simon Stolp, World Bank’s Lead Energy Specialist and one of the Task Team Leaders for the program.
The GEF Program is one of the largest and longest standing trust-funded programs in the World Bank Group. Since 1991, when the World Bank helped to establish the GEF, it has integrated global environmental benefits across the Bank programs through more than 790 investment projects and programs in 120 countries.